BEFORE THE DAKSHINA KANNADA DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, MANGALORE

Dated this the 28^th of February 2011

PRESENT

        SMT. ASHA SHETTY           :   PRESIDENT

                        SMT.LAVANYA M. RAI       :   MEMBER

                        SRI. ARUN KUMAR K.        :   MEMBER

COMPLAINT NO.284/2010

(Admitted on 23.10.2010)

Sri.Udaya Bhat,

So. Ganapathi Bhat,

Aged about 42 years,

RA. Laxminivas House,

Mogere Post,

Belthangady,

Dakshina Kannada District.               …….. COMPLAINANT

(Advocate for the Complainant: Sri.Sanjay D).

          VERSUS

1. Chief Executive Officer,

Yashaswini Co-operative Farmers

     Health Care Scheme,

6^th Floor, M.S. Building,

Co-Op. Secretariat,

Ambedkar Veedi,

Bangalore – 1.

2. Manager,

Padmunja C.A. Bank,

P.O. Kaniyur,

Belthangady Taluk,

Dakshina Kannada.                   ……. OPPOSITE PARTIES

(Advocate for the Opposite Parties: Sri. Sri.Thimmayya P).

                                      ***************

ORDER DELIVERED BY PRESIDENT SMT. ASHA SHETTY:

1.       This complaint is filed under Section 12 of the Consumer Protection Act alleging deficiency in service against the Opposite Parties claiming certain reliefs. 

The brief facts of the case are as under:

The Complainant along with his wife became the member of Yashaswini Health Scheme and the same is valid for one year as per receipt No.15930453.  As per the above Scheme, the Complainant is entitled for reimbursement of the medical expenses. 

It is stated that, on 16.06.2009 the Complainant has underwent operation for tests and ext. genitalia at Dhanvanthari Hospital Puttur and was discharged on 24.06.2009 and spent Rs.13,603/- to the medical treatment.  Thereafter the Complainant has gone to the 2^nd Opposite Party with the relevant documents but the 2^nd Opposite Party refused to receive the claim of the Complainant.  Thereafter, the Complainant has sent the claim papers to the 1^st Opposite Party as per letter dated 13.08.2009 through registered lawyer’s notice with all relevant documents.  The 1^st Opposite Party despite of receiving the above claim not honoured the claim till this date.

The further allegation of the Complainant is that, the membership receipt issued by the Opposite Party is vague and does not contain the details i.e., the name of the network hospitals, procedure of the pre-authorization, name of the diseases covered, pre-conditions and other details in order to obtain the mediclaim under the scheme.  It is stated that, the non-payment of the mediclaim by the Opposite Parties under the scheme till this date amounts to deficiency and filed the above complaint before this Forum under Section 12 of the Consumer Protection Act 1986 (herein after referred to as ‘the Act’) seeking direction from this Forum to the Opposite Parties to pay Rs.13,603/- along with interest at 12% p.a. from 24.06.2009 till payment and also claimed Rs.20,000/- as compensation and cost of the proceedings.

2.       Version notice served to the Opposite Parties by RPAD. Opposite Party No.1 and 2 appeared through their counsel filed similar version.  Opposite Parties admitted the membership of the Complainant and also validity of the policy and the I.D. of the Complainant.  But it is denied that, the Complainant has underwent operation for tests and ext. genitalia on 16.06.2009 at Dhanvanthari Hospital Puttur and discharged on 24.06.2009 and spent a sum of Rs.13,603/- for the medical treatment. 

It is submitted that, the complaint is bad for non-joinder of necessary party because the hospital is not made as a party to the proceedings.  It is further submitted that, the 1^st Opposite Party is not Insurance, it is a trust formed by the Government of Karnataka to help the co-operative farmers in the year 2003.  In order to avail the benefits of the Yashaswini Scheme, the member has to follow the procedures prescribed under the scheme.  That the member has to be operated in any of the network hospital earmarked by the trust.  As per the list of the network hospital, Dhanvanthari hospital Puttur is not listed hospital and hence the Complainant is not entitled for the mediclaim and prayed for dismissal of the complaint. 

3.       In view of the above said facts, the points now that arise for our consideration in this case are as under:

1. Whether the Opposite Parties prove that the complaint is bad for non-joinder of necessary parties?

2. Whether the Complainant proves that the Opposite Parties committed deficiency in service?

3. If so, whether the Complainant is entitled for the reliefs claimed?

4. What order?

4.       In support of the complaint, Sri.Udaya Bhat (CW1) filed affidavit reiterating what has been stated in the complaint and answered the interrogatories served on him.   Ex C1 to C8 were marked for the Complainant as listed in the annexure.   One Sri.Poovappa (RW1), Chief Executive Officer of the Opposite Party No.1 filed counter affidavit and answered the interrogatories served on him.  One Sri.Thimmayya Gowda (RW2), Manager of the Opposite Party No.2 filed counter affidavit and answered the interrogatories served on him.  Ex R1 and R6 were marked for the Opposite Parties as listed in the annexure. The Complainant filed notes of arguments along with copy of the appeal order.  Opposite Parties also filed notes of arguments.

            We have considered the notes/oral arguments submitted by the learned counsels and also considered the materials that was placed before this Forum and answer the points are as follows:

                       Point No.(i): Negative.

                       Point No.(ii) to (iv): As per the final order.  

Reasons

5.  Point No. (i):

As far as point No.(i) is concerned, the Opposite Parties took a contention that, the complaint is bad for non-joinder of necessary party cannot be considered in this case because there is no contractual relationship between the Complainant and the treating hospital.  The contract is with the Opposite Parties not with the hospital.  Hence, the question of making the hospital as necessary party does not arise.  Point No.(i) held in favour of the Complainant.

Point No.(ii) to (iv):

As far as deficiency is concerned, the facts which are not in dispute is that, the Yashaswini scheme is a benevolent Insurance Health Scheme introduced by the Government of Karnataka to provide medical assistance to Co-operative farmers and their family members in the year 2003.  It is also admitted that, the Complainant along with his wife obtained the membership of Yashaswini Health Scheme as per receipt 1593043 and the same is valid for one year (as per Ex C1).  It is also admitted that, as per the above Insurance Scheme, the 1^st Opposite Party i.e., a trust formed by the Government of Karnataka undertaken to reimburse the medical expenses to the members by introducing Yashaswini Scheme. 

Now the point in dispute between the parties before this Forum is that, the Complainant contended that, the Opposite Parties not reimbursed the medical expenses under the scheme and also contended that, the Opposite Parties not issued the insurance policy which containing all the details which includes the name of the network hospital or the information with regard to pre-authorization procedure, diseases covered and pre-conditions etc. etc. The membership receipt issued by the Opposite Parties does not give any vital details of mediclaim insurance policy and they are not aware of the name of the network hospitals. 

The Opposite Party No.1 and 2 interalia contended that, to avail benefit under Yashaswini scheme, the beneficiary has to follow the procedures prescribed under the scheme.  In order to claim any amount under the scheme, the member has to undergo operation in any of the network hospital earmarked by the trust.  In the receipt issued to the members clearly mentioned that, the member has to take treatment only at network hospital.  In instant case, Dhanvanthari Hospital is not listed hospital hence the claim is not entertainable. 

In order to prove the case of the Complainant, the Complainant filed oral evidence by way of affidavit and produced Ex C1 to C8.  Opposite Party No.1 and 2 also filed oral evidence by way of affidavit and produced Ex R1 to R6.

On scrutiny of the oral as well as documentary evidence available on record, we find that, the above scheme is introduced by the Government to the poor farmers who can avail benefits under the Yashaswini Scheme.  But in the instant case, Complainant along with his wife became the member of the Yashaswini Scheme and the Opposite Parties in turn issued identity card bearing No.1593043 (as per Ex C1).  During the existence of the scheme, the Complainant admitted to the hospital.  The Ex C3 is the consolidated bill issued by Dhanvanthari Hospital, Puttur shows that, the Complainant has spent Rs.13,603/-.  Ex C4 is the discharge summary dated 16.06.2009 reveals that, the Complainant has underwent operation for tests and ext. genitalia on 16.06.2009 at Dhanvanthari Hospital and discharged on 24.06.2009.  The Ex C5 is the self declaration, Ex C6 is the registered legal notice dated 13.08.2009 calling upon the Opposite Parties to reimburse the medical expenses spent by him. Ex C7 and C8 are the letters issued by the Opposite Parties to the Complainant’s advocate.  However, we have perused the Ex R1 i.e., the trust deed shows that, the member has to follow certain procedure i.e., to avail the benefit one has to undergo treatment in network hospitals.  The Ex R2 produced by Opposite Parties reveals certain names of the hospitals i.e., 18 in numbers.  No doubt, in the above said list the name of the Dhanvanthari Hospital Puttur is not reflecting.  The above said notification is issued by the Opposite Party No.1 dated 27.01.2010 but there is no document to show that, the above said notification was brought to the knowledge of the beneficiaries/ members herein the Complainant is not forthcoming.  In other words, the notification issued by the 1^st Opposite Party was not brought into the knowledge of the Complainant.  The Ex R3 is the pamphlet published by the Opposite Parties, Ex R4 is the copy of the I.D. card, Ex R5 is the list of the network hospitals and Ex R6 is the copy of the reply issued by the Opposite Party No.2 to the advocate of the Complainant. 

We have noticed that, the Opposite Parties failed to disclose the hospital names either in the brochure or in the identity card or in the beneficiary receipt issued by the Opposite Parties.  Mere mentioning in the trust deed is not sufficient but it has to reach to the member’s knowledge.  But, the Ex C1 i.e., the I.D. card which is the vital document issued by the Opposite Party in proof of the membership does not contain any particulars which includes the name of the recognized hospital or does not say how the pre-authorization is to be obtained, which are the diseases covered, what are the pre-conditions and who has to obtain pre-authorization.  In the absence of the same, it is very difficult for the beneficiaries to go in search of the network hospitals when they fell sick.  It is significant to note that, the Opposite Parties failed to disclose the hospital names either in the brochure or in the I.D. card or in the beneficiary receipt issued by the Opposite Parties.  In the absence of any disclosure of the hospitals to the beneficiaries herein the Complainant, he cannot take advantage/ benefit of the policy.  It is pertinent to note that, the terms and conditions must be in the knowledge of the beneficiary/member of the Yashasvini Scheme that they should go or avail service only under the notified hospitals.  In the absence of any such disclosure either in the I.D. card or in the beneficiary receipts or in the brochure, it is very difficult for the beneficiaries go in search of the hospitals as stated supra. 

Further it is a settled law that, in case, the Opposite Parties suppresses any details, concealment of any material facts, it adversely affects the policy/scheme.  The Hon’ble National Commission held that, “the exclusion clauses if not explained they are not binding on the insured.  Those exclusion clauses are required to be ignored if mandatory requirement of explaining exclusion clause not adhered by insurer/agent before issuance of insurance cover. [reported in 2009 III CPJ 246 (NC)].  In another case, the Hon’ble National Commission has held that, when statute provides manner in which particular thing must be done, same must be done in that manner only.  [reported in 2007 III CPJ 34 (NC)]. 

Similarly, in the instant case, though the Opposite Parties introduced Yashaswini Scheme for the benefit of the poor farmers, it is the bounden duty of the Opposite Parties to explain/disclose the hospital names to the beneficiaries to get the benefits.  It is to be stated that, the above said scheme is a benevolent scheme started by the Government of Karnataka to provide medical assistance to the poor farmers and to protect the interest of the members of the Yashasvini Scheme holders.  Firstly, the Opposite Party should see that, the terms of the Insurance Scheme do not operate harshly against the insured and in favour of the insurer.  A prospectus of insurance product are required to clearly state the scope of benefits, the extent of insurance cover and in explicit manner explain the warranties, exceptions and conditions of the insurance cover and the product shall be clearly spelt out with regard to their scope of benefits and also it is made very clear under the regulation that, insurer or its agent or other intermediary shall provide all material information in respect of the proposed cover to the insured.  The Regulatory Authorities taken much care to protect the interest of the consumers.  Under such circumstances, the scheme introduced by the trust or agent or companies/Government shall protect the interest of the beneficiaries/consumers herein the Complainant.  In our view, the unexplained or unnoticed information regarding the hospitals would not be binding to the insured.  The reason being, the regulations are mandatory in nature so as to protect the consumer’s interest.  It is a well settled law that, when a statute or regulations provides for a manner in which a particular thing must be done, then that thing must be done in that manner only.  The Rule of Law laid down in Taylor vs. Taylor 1876 1 Ch.D 426 has been founded on sound principle and well recognized and followed by courts in India for several decades.  The principle laid down is that, “if a statute has conferred a power to do an act and has laid down the method in which that power has to be exercised, it necessarily prohibits the doing of the act in any other manner than that which has been prescribed”.   The principle behind the rule is that if these were not so, the statutory provision might as well would have not been enacted.  [III (2007) CPJ 34 (NC)]. 

Even in the present case, though the Government introduced the benevolent scheme i.e., Yashaswini Health Scheme, it cannot overlook the Regulation laid down under the Insurance Regulatory and Development Authority (Protection of Policy Holder’s Interest), Regulations, 2002 framed by Insurance Regulatory and Development Authority.  Thus, it is the duty of the Opposite Parties to disclose the terms and conditions/procedures/ hospital names and other details notified by the Government under the scheme while issuing the Identity Card or beneficiary receipt or the brochure.  But the Opposite Parties failed to discharge their duty to disclose the above terms and conditions or failed to brought to the notice of the Complainant to get the benefit while issuing the Identity Card or related documents.  There is no material evidence produced before this FORA to show that, the terms and conditions to avail the benefit under the scheme is within the knowledge of the Complainant.  In the absence of the same, the Complainant cannot be blamed.  Non-furnishing the details/terms and conditions to the Complainant under the scheme amounts to deficiency and at the same time the terms and conditions claimed by the Opposite Parties at this stage is not binding on the Complainant.   

In view of the above discussion, we are of the considered opinion that, though the Opposite Parties received the membership fee under the Yashaswini Scheme and admitted that, the Complainant is one of the member under the Yashaswini Scheme and the said scheme is valid to avail medical benefits for one year but the Opposite Parties not reimbursed the medical expenses stating that the Complainant has not followed the procedures prescribed under the scheme without serving the terms and conditions amounts to unfair trade practice and deficiency as stated supra.  Under that circumstances, we hereby direct the Opposite Party No.1 to pay Rs.13,603/- to the Complainant towards the medical expenses and also pay compensation of Rs.5,000/- for the harassment and inconvenience caused to the Complainant.  And Rs.1,000/- awarded as cost of the litigation expenses. Payment shall be made within 30 days from the date of this order.

There is no contractual relationship between the Complainant and Opposite Party No.2 under the scheme, hence complaint against Opposite Party No.2 is hereby dismissed.

6.       In the result, we pass the following:                          

ORDER

The complaint is partly allowed.  We hereby direct the Opposite Party No.1 to pay Rs.13,603/- (Rupees thirteen thousand six hundred and three only) to the Complainant towards the medical expenses as per Ex C3.  We further direct the Opposite Party No.1 to pay Rs.5,000/- (Rupees five thousand only) to the Complainant as compensation and Rs.1,000/- (Rupees one thousand only) as cost of the litigation expenses. Payment shall be made within 30 days from the date of this order.

        On failure to pay the aforementioned amount within the stipulated time as mentioned above the Opposite Party No.1 is hereby directed to pay interest at the rate of 10% p.a. on the total amount from the date of failure till the date of payment.

Complaint against Opposite Party No.2 is hereby dismissed.

The copy of this order as per the statutory requirements be forwarded to the parties free of charge and therefore the file be consigned to record room.

(Page No.1 to 14 dictated to the Stenographer typed by her, revised and pronounced in the open court on this the 28^th day of February 2011.)

PRESIDENT                    MEMBER                              MEMBER

ANNEXURE

Witnesses examined on behalf of the Complainant:

CW1 – Sri.Udaya Bhat – Complainant.

Documents produced on behalf of the Complainant:

Ex C1 & C2 – 19.03.2010: Copy of the I.D. card and membership receipt (2 in numbers).

Ex C3 – 16.06.2009: Consolidated bill issued by Dhanvathari Hospital, Puttur for Rs.13,603/-.

Ex C4 – 16.06.2009:  Discharge summary issued by Dhanvanthari Hospital Puttur.

Ex C5 – 22.06.2009: Original Self-declaration.

Ex C6 – 13.08.2009: Lawyer’s notice issued to the Opposite Parties on behalf of the Complainant.

Ex C7 – 29.09.2009: Reply of the 1^st Opposite Party to the above legal notice dated 13.08.2009.

Ex C8 – 26.08.2009: Reply of the 2^nd Opposite Party to the legal notice dated 13.08.2009.

Witnesses examined on behalf of the Opposite Parties:

RW1 – Sri.Poovappa, Chief Executive Officer of the O.P. No.1.

RW2 – Sri.Thimmayya Gowda, Manager of the O.P. No.2.

Documents produced on behalf of the Opposite Parties: 

Ex R1 – 10.11.2003: Copy of the Trust Deed.

Ex R2 –                 : Name of the network hospitals.

Ex R3 –                :  Original pamphlet.

Ex R4 -                  : Copy of the I.D. card issued to the Complainant.

Ex R5 -                  : Name of the network hospitals.

Ex R6 – 26.08.2009: Xerox copy of the letter issued by the Opposite Party No.2 to the advocate of the Complainant.

Dated:28.02.2011                            PRESIDENT